FDBusiness.com

Nestlé has reported organic growth of 4.5% to reach sales of SFr42.8 billion (Eur39.3 billion) in the first half of 2015. This was composed of 1.7% real internal growth and 2.8% pricing. Total sales were impacted by foreign exchange factors of -5.8% and acquisitions, net of divestitures, contributed 1% to sales.

Trading operating profit was SFr6.4 billion with a margin of 15.0%, up 20 basis points in constant currencies.

Nestlé’s continuous drive for cost efficiencies, and the consolidation of Nestlé Skin Health, led to a 160 basis points drop in the cost of goods sold. Cost reductions were partly reinvested in increased consumer facing marketing support. Net profit was SFr4.5 billion and reported earnings per share were SFr1.43, with underlying earnings per share rising by 7.3% in constant currencies.

Sales growth was broad-based across the group’s product categories and geographies. Organic growth in the developed markets accelerated to 2.2% while in the emerging markets Nestlé achieved strong organic growth of 7.3%.

Organic growth was 6.6% in the Americas (AMS), 3.4% in Europe, Middle East and North Africa (EMENA) and 2.2% in Asia, Oceania and sub-Saharan Africa (AOA). Real internal growth was 1.7% in AMS, 2.4% in EMENA and 0.6% in AOA.

Paul Bulcke (pictured), chief executive of Nestlé, comments: “The first half results were in line with our expectations, broad-based across categories and geographies, solid even in difficult circumstances, and consistent with our strong performance over time. They reflect the relevance and strength of our Nutrition, Health and Wellness strategy and our discipline in execution. Our investments in the new growth platforms Nestlé Health Science and Nestlé Skin Health are delivering and complement the good momentum in our food and beverages businesses.”

Nestlé has confirmed its full year outlook of organic growth of around 5% with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency.